USA mini Oligarchy of Illinois

A Handful of rich families set out remake Illinois politics here’s what happened?

Wealthy Governor and His Friends Are Remaking Illinois

Kenneth C. Griffin, the billionaire founder of one of the world’s largest hedge funds, and a small group of rich supporters have poured tens of millions of dollars into Illinois, a concentration of political money without precedent in the state’s history. Their wealth has forcefully shifted the state’s balance of power. Last year, the families helped elect as governor Bruce Rauner, a Griffin friend and former private equity executive from the Chicago suburbs, who estimate his own fortune at more than $500 million. Now they are rallying behind Mr. Rauner’s agenda: to cut spending and overhaul the state’s pension system, impose term limits and weaken public employee unions.

The richest man in Illinois does not often give speeches. But on a warm spring day two years ago, Kenneth C. Griffin, the billionaire founder of one of the world’s largest hedge funds, rose before a black-tie dinner of the Economic Club of Chicago to deliver an urgent plea to the city’s elite.Unprecedented political spending helped elect a fresh-faced financier. But his ideological vision has unsettled many in the state.

They had stood silently, Mr. Griffs pin told them, aoliticians taxed too much, spent too much and drove businesses and jobs from the state. They had refused to help those who would take on the reigning powers in the Illinois Capitol. “It is time for us to do something,” he implored.

Their response came quickly. In the months since, Mr. Griffin and a small group of rich supporters – not just from Chicago, but also from New York City and Los Angeles, southern Florida and Texas – have poured tens of millions of dollars into the state, a concentration of political money without precedent in Illinois history.

Their wealth has forcefully shifted the state’s balance of power. Last year, the families helped elect as governor Bruce Rauner, a Griffin friend and former private equity executive from the Chicago suburbs, who estimate his own fortune at more than $500 million. Now they are rallying behind Mr. Rauner’s agenda: to cut spending and overhaul the state’s pension system, impose term limits and weaken public employee unions.

“It was clear that they wanted to change the power structure, change the way business was conducted and change the status quo,” said Andy Shaw, an acquaintance of Mr. Rauner’s and the president of the Better Government Association, a nonpartisan state watchdog group.

The families remaking Illinois are among a small group around the country who have channeled their extraordinary wealth into political power, taking advantage of regulatory, legal and cultural shifts that have carved new paths for infusing money into campaigns. Economic winners in an age of rising inequality, operating largely out of public view, they are reshaping government with fortunes so large as to defy the ordinary financial scale of politics. In the 2016 presidential race, a New York Times analysis found last month, just 158 families had provided nearly half of the early campaign money.

Many of those giving, like Mr. Griffin, come from the world of finance, an industry that has yielded more of the new political wealth than any other. The Florida-based leveraged-buyout pioneer John Childs, the private equity investor Sam Zell and Paul Singer, a prominent New York hedge fund manager, all helped elect Mr. Rauner, as did Richard Uihlein, a conservative businessman from the Chicago suburbs.

Most of them lean Republican; some are Democrats. But to a remarkable degree, their philosophies are becoming part of a widely adopted blueprint for public officials around the country: Critical of the power of unions, many are also determined to reduce spending and taxation, and are sceptical of government-led efforts to mitigate the growing gap between the rich and everyone else.

“There was never so much money behind these efforts,” said Iris J. Lav, formerly a senior adviser at the Center on Budget and Policy Priorities, a left-leaning economic think tank in Washington.

“It has gotten much stronger in the last five or six years,” Ms. Lav continued. “There’s the sense of an opening, of a discontent with the old model. It’s about social insurance, the social compact – who’s responsible for whom?”

Illinois was fertile ground for the movement. Four of the state’s last 10 governors have gone to jail. Decades of mismanagement by state officials of both parties have left Illinois with more than $100 billion in unfunded pension liabilities, among the most of any state. Public employee unions, assured that the state’s Constitution made their retirement benefits untouchable, focused on lobbying for other spending. By last year, the state owed billions more in unpaid bills.

And tax increases are particularly difficult in Illinois, where other state constitutional provisions ban raising taxes solely on the rich. A temporary income tax boost presided over by the state’s last Democratic governor, Pat Quinn, was resented by many voters.

Bruce Rauner, sworn into office as the governor of Illinois in January.

The future governor was among those fuming. Around Chicago, Mr. Rauner, a Republican, was known for dashing off angry, blind-copied emails about the state’s fiscal woes to a long list of fellow businessmen and political leaders. Some of those who coalesced around his campaign, like Mr. Griffin, had also backed Mayor Rahm Emanuel of Chicago, a Democrat, in his battles with teachers’ unions. Others had collaborated on endeavors including Chicago’s Olympic bid, or the Civic Committee of the Commercial Club of Chicago, a group of wealthy and politically active business leaders. (Mr. Rauner, Mr. Griffin and other supporters declined requests for interviews.)

“They’re not what you would call the traditional corporate world,” said William M. Daley, a Chicago hedge fund executive and former chief of staff to President Obama, who served on Mr. Rauner’s transition team. “They come with a very political and philosophical bent.”

Mr. Daley added, “I think they believe philosophically in that business mentality and that strong public unions are a root of all evil in governing places like Illinois or Chicago and New York and California.”

To bring about a revolution in the Illinois Capitol, in Springfield, Mr. Rauner and his allies have created what amounts to a new campaign economy, in which union money has long been the financial lifeblood of both parties. Contributing millions to his own campaign, Mr. Rauner triggered a state law that removes limits on campaign contributions when a wealthy candidate spends heavily on his or her own race.

The law, intended to limit the influence of the wealthy by providing a level playing field, had the opposite effect: Freed of the restraints, supporters of Mr. Rauner poured millions more into his campaign, breaking state records. About half of the $65 million he spent through last year’s election came from himself and nine other individuals, families or companies they control. Mr. Quinn, the incumbent, spent about $32 million, with many unions making mid-six-figure contributions.

Mr. Rauner’s biggest donor was Mr. Griffin, who gave $5.5 million and put his private plane at Mr. Rauner’s disposal. Mr. Rauner’s allies spent millions on political advocacy groups, research organizations and party committees. The Chicago Sun-Times reversed its no-endorsement policy to back Mr. Rauner, who was a part-owner of the paper before he ran for governor.

“He didn’t have to play by the same rules as other candidates,” said Bill Hyers, the chief strategist to Mr. Quinn. “He just kept on spending.”

Never before in modern Illinois politics had so few people provided so much of the money for campaigns

The size of the average contribution in last year’s general election almost tripled over those made in the previous governor’s race, according to a Times analysis of campaign records collected by Illinois Sunshine, a project of the Illinois Campaign for Political Reform.

Local Republican organizations found themselves flush with cash. Mr. Rauner blanketed the state with ads promising, vaguely, to “shake up Springfield” and slammed Mr. Quinn as an insider beholden to special interests.